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Thursday, September 30, 2010

CENTRAL EYES CARREFOUR AS CENTRALWORLD REOPENS

Central Group yesterday reaffirmed its interest in participating in the bid for Carrefour's local operations against rivals like Casino (owner of Big C Supercentre) and Berli Jucker (BJC). Carrefour operates about 43 hypermarkets in Thailand but plans to discontinue its operations here and elsewhere in the region.

Suthichai Chirathivat, executive chairman of Central Group, said in his first media interview on the issue that the group had allocated a "special extra budget" for the acquisition, which would be in addition to normal investment for retail expansion, set at about Bt16 billion this year.

He said that if the bid were successful, the Carrefour operations would fulfil the group's ambition of being a key operator of such multiple-retail formats.

"Operated by Central Retail Corporation, we now handle many retail formats in our portfolio. We are interested in acquiring Carrefour, as the chain will help fulfil our retail portfolio, especially in the hypermarket segment," Suthichai said.

CRC also owns a minor stake in Big C Supercentre, which operates about 68 branches in Thailand.

"It will be OK whether we win the Carrefour bid or not. If we win, the most benefit we will get is to gain higher bargaining power with suppliers in purchasing goods for the stores," Suthichai said.

Suthichai said the group had not yet decided whether it would maintain the Carrefour name or rename the stores if the bid is successful.

He said the company would also allocate Bt16 billion of its annual investment budget for retail expansion next year, including a Bt10-billion retail project on a leased plot formerly held by the British Embassy, on which development would start by the middle of next year.

Meanwhile, the lively shopping atmosphere of the Rajprasong intersection returned to normal yesterday after the reopening of CentralWorld shopping complex, which had been closed for four months after it was damaged during the political unrest and prolonged anti-government rally in the area.

"The reopening of CentralWorld is quite different from the first opening of this shopping complex three to four years ago," said Kobchai Chirathivat, president and chief executive of Central Pattana (CPN), which operates CentralWorld shopping complex. "We have opened up to 80 per cent of the total shopping space this time."

He said that utilising its experience at the location before the closure, CPN had focused not just on reopening the building itself but on decoration, merchandising and the security system.

Kobchai expected the shopping complex to draw about 100,000 shoppers on the first day of the reopening, increasing to between 150,000-200,000 shoppers by year-end.

CPN plans to spend about Bt150 million on the marketing campaigns and activities created to support the reopening of CentralWorld.

Kobchai said the company expected CentralWorld to generate sales of between Bt200 million and Bt300 million in the last quarter this year. The shopping complex is expected to generate sales of between Bt500 million and Bt600 million in the fourth quarter next year when all retail tenants and anchors, including Zen Department Store, are fully opened.

Aswin Ruanglertbutr, president and CEO of Peppo Fashions Group, which distribute such well-known brands as Guess, MNG by Mango, Castro and Promod, said CentralWorld stores were poised to become a growth driver for the company, which had just started to build its business and then was hit by the political crisis.

He said the impact had been huge, as insurance had yet to be settled and repairs to the damage of each store had to be funded from other sources.

"We do look forward to the return of all our customers who shop at CentralWorld, including the tourists who were visiting regularly. Our expected fourth-quarter performance growth should build up towards year-end holiday sales," Aswin said.

The company currently operates 21 standalone shops covering four fashion brands, he said. Four of them are at CentralWorld, with Promod, Mango and Castro opening first. Guess will reopen its store with the latest concepts by mid-November.

Aswin said the reopening of CentralWorld would help draw shoppers and boost sales of retail tenants in the Rajprasong area.

"The mood of the people will lift the life in the heart of Rajprasong once again, having been dampened for so long by all the damaging incidents that had occurred," he said. "Sales will naturally pick up as regular visitors and shoppers utilise many of the services, restaurants and shopping at CentralWorld. The opening will definitely [please] the numerous office workers in the area."

Satima Tanabe, deputy general manager of Gaysorn Land Asset Management, operator of Gaysorn Shopping Centre, said: "Even though it is not yet a complete opening, we are confident that the first-phase reopening of CentralWorld will bring people back to the Rajprasong area, and also create a positive shopping sentiment.

"Also, as we are gearing up for the fourth quarter, our upcoming marketing activities will help boost both sales and traffic, which we positively expect to achieve at least the same as we did last year, despite the two-month closure," she said.